Clarion Prince Charles hotel to be auctioned

NC Foreclosure News

By Al Greenwood
Staff writer

The Clarion Prince Charles hotel is in foreclosure and under new management.

Zions First National Bank started foreclosure proceedings because the hotel’s owner, R.K. Properties Inc., defaulted on a $2.3 million loan, according to court documents. In fact, R.K. has not made any monthly payments since October.

The bank plans to sell the hotel at a public auction Feb. 27.

The president of R.K., Rakesh Kaushal, did not return a call seeking comment.

The terms of the loans said that if R.K. defaulted, a receiver could be appointed to run the hotel, according to court documents. Zions filed a petition on Jan. 26 asking that the Cumberland County Superior Court appoint Summit Hotel Management Co. of Fort Lauderdale, Fla., as the receiver. The court granted the request that same day.

Zions requested a receiver because a new manager could make the hotel more profitable, said Dudley Whitley III, a lawyer from Rocky Mount who is representing the bank.

If the hotel is performing well — with high occupancy rates and full conference rooms — then it could attract a high price during the public auction, Whitley said. The sale could clear R.K.’s debts with the bank.

With so much depending on improved Prince Charles performance, patrons should notice, if anything, better service at the hotel, Whitley said.

“Our expectations are that the day-to-day operations of that hotel will be better this week than they were last week,” he said. “And it will continue to get better and improve until there is an ultimate purchaser of the hotel.”

R.K. could avoid the foreclosure by paying off the loan or by filing for bankruptcy protection.

The owner of one hotel, the Fayetteville Inn and Suites, did just that days before the auction.

If R.K. does file for bankruptcy, it would likely do so under Chapter 11, Whitley said. Under Chapter 11, the hotel would stay open while R.K. reorganizes its finances.

As it is, Whitley said he doubts the company will file for bankruptcy.

The Prince Charles has been in foreclosure and bankruptcy before during its 81-year history. It was sold at a public auction in 1929, fewer than four years after it opened. The city condemned the hotel in 1979, a bank foreclosed on it in 1990, and the owners filed for bankruptcy protection shortly afterward.

The Prince Charles is the third local hotel to go into foreclosure in less than a year. In addition to the Fayetteville Inn and Suites, the Fayetteville Plaza also went into foreclosure. It was sold at public auction to Balbir Brar.

Article Source http://www.fayobserver.com/article?id=253553